Health Law's Individual Mandate Has It's Day In Court

CHIEF JUSTICE JOHN ROBERTS: We will continue argument this morning in Case 11398, the Department of Health and Human Services vs. Florida. General Verrilli...

DONALD VERRILLI: Mr. Chief Justice and may it please the court, the Affordable Care Act addresses a fundamental and enduring problem in our health care system and our economy.

CONAN: Chief Justice John Roberts and Solicitor General Donald Verrilli, the government's lawyer, at the Supreme Court this morning for what many consider the main event: arguments over whether or not the federal government can require individuals to buy health insurance, by far the Affordable Care Act's most controversial provision.

Today, we're going to play substantial excerpts of the oral arguments and discuss what they tell us about how the justices may decide this issue come June, that of course in the run-up to the major-party political conventions. The court, of course, has to know their votes could have an important effect on the presidential campaign.

Later in the program, the legacy of Tennessee's Pat Summitt as the Lady Vols are knocked out of the NCAA women's tournament. But first, day two of the health care hearings at the Supreme Court. David Savage at the high court today. He's the Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune newspapers, and joins us once again to talk about the arguments. So, David, good of you to be back with us.

DAVID SAVAGE: Hi, Neal.

CONAN: And it seems like Solicitor General Donald Verrilli stumbled right out of the gate.

SAVAGE: Yes, and things never got better. I thought it was a very bad day for the government's defense of the health care law. Don Verrilli had a tough time, but I think the biggest problem was that the conservative justices sort of shared the view of the critics.

At the very beginning of the argument, Justice Kennedy said: I think this is really an unprecedented step. We've never allowed - we've never allowed something quite like this before. It puts an affirmative duty on citizens to, you know, to buy a product. He said it would change in a very fundamental way the relationship between the federal government and individual citizens.

And that - as you know, Neal, that's been the argument from the beginning of the opponents, that they've said sure, Congress can regulate commerce, but what they can't do is force someone to engage in commerce by buying insurance.

CONAN: Chief Justice Roberts stated that this way, almost at the beginning of the arguments.

VERRILLI: In this case, the - what is being regulated is the method of financing health, the purchase of health care. That itself is economic activity with substantial effects on interstate commerce. And...

CONAN: Chief Justice Roberts among the first to question Solicitor General Donald Verrilli. Here they are in exchange about the government power.

ROBERTS: The same, it seems to me, would be true, say, for the market in emergency services; police, fire, ambulance, roadside assistance, whatever. You don't know when you're going to need it, you're not sure that you will. But the same is true for health care. You don't know if you're going to need a heart transplant or if you ever will. So there is a market there. To - in some extent, we all participate in it.

So can the government require you to buy a cell phone because that would facilitate responding when you need emergency services, you can just dial 911 no matter where you are?

VERRILLI: No, Mr. Chief Justice. think that's different. It's - we - I don't think we think of that as a market. This is a market. This is market regulation. And in addition, you have a situation in this market not only where people enter involuntarily as to when they enter and won't be able to control what they need when they enter but when they...

ROBERTS: It seems to me that's the same as in my hypothetical. You don't know when you're going to need police assistance. You can't predict the extent to emergency response that you'll need. But when you do - and the government provides it. I thought that was an important part of your argument, that when you need health care, the government will make sure you get it.

VERRILLI: Well...

ROBERTS: When you need police assistance or fire assistance or ambulance assistance, the government is going to make sure to the best extent it can that you get it - get it.

VERRILLI: I think the fundamental difference, Mr. Chief Justice, is that that's not an issue of market regulation. This is an issue of market regulation, and that's how Congress, that's how Congress looked at this problem. There is a market. Insurance is provided through a market system...

CONAN: And David Savage, if there's a market, if there's commerce, then this is covered by the Interstate Commerce clause.

SAVAGE: Right, that was Don Verrilli's argument. The problem was that Chief Justice Roberts really went on to say that if we uphold this, then the government essentially can require people to buy products in a lot of different ways. And you can - you know all the examples that have been cited, is that - an easier way to solve some problems would be just to require people to purchase a particular problem, and Roberts seemed to have pretty firmly in his mind is that that's a step - quite a new step, something we at the Supreme Court haven't done before, and was a very bad idea.

He said it would eliminate the principle in the Constitution that the federal government's powers are limited.

CONAN: And if they're - in other words, where is the limit? If they can force you to buy health insurance, can they force you to buy, as we just heard the chief justice say, cell phones?

SAVAGE: Right, and later on, it was broccoli and gym membership. You know, Justice Scalia - this is the kind of thing you hear on the cable news at night or whatever, that, well, it's a good idea if people are healthy and exercise. So why couldn't the government just require you to join a gym and so on?

But I think the reason I think that was important was because for Don Verrilli and the administration to win, they have to make the argument he was making. He said health care is, first, different. It's not like buying a television set. You're going to have - you're going to some in your life, you're going to have a health problem, and you're going to have to go to a hospital and get care. And it's not an option. It's going to happen to everybody.

And second, that if people don't participate in that or don't pay for insurance, it forces the costs on others. And for most of the argument, the conservative justices didn't buy that. They were focused on the idea that this is something new, it's requiring people to buy a product, and if we allow this, there are no limits left to the federal - the power of Congress to enact laws.

CONAN: If the government's going to win, it probably will have to win the vote of Justice Anthony Kennedy, usually considered the swing vote on this course, and here he is in exchange with the solicitor general, elaborating on his question of whether or not the government overstepped its authority.

JUSTICE ANTHONY KENNEDY: Help me with this. Assume for the moment - you may disagree. Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act, to go into commerce. If that is so, do you not have a heavy burden of justification?

I understand that we must presume laws are constitutional, but even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

VERRILLI: So, two things about that, Justice Kennedy. First, we think this is regulation of people's participation in the health care market, and all - all this minimum coverage provision does is say that instead of requiring insurance at the point of sale that Congress has the authority under the commerce power and the necessary proper power to ensure that people have insurance in advance of the point of sale because of the unique nature of this market, because this is a market in which - in which you - although most of the population is in the market most of the time - 83 percent visit a physician every year; 96 percent over a five-year period.

So virtually everybody in society is in this market, and you've got to pay for the health care you get, the predominant way in which it's - in which it's paid for is insurance, and - and the respondents agree that Congress could require that you have insurance in order to get health care or forbid health care from being provided...

CONAN: And from that, do we think that Justice Kennedy is still on the fence?

SAVAGE: Well, it sure sounded as though he was leaning on the side of saying this is unconstitutional. He is - you know, he's not as strident or vehement in his questioning, as you could tell. He sort of says these things sort of solemnly, in saying isn't there a heavy burden on the, you know, government to come up with a very strong justification? But it sure sounded throughout the argument that he was on the side inclined to think this was unconstitutional.

CONAN: We, in advance of thought, most people did, that Justices Scalia, Alito and Clarence Thomas would be in opposition all along, Roberts and Kennedy maybe in the middle. Did the government get any help from the four more-liberal justices?

SAVAGE: Well, they tried. The - Justice Breyer had said, oh, come on, back to early part of the, you know, the 1800s, we - the Supreme Court, John Marshall upheld the National Bank. That was sort of creating commerce. There's a long history of both creating commerce and regulating commerce.

Ruth Ginsberg talked about insurance, that insurance is the kind of thing that, you know, you have to pay now because of the risk you're going to, you know, take on later, and it's entirely reasonable, if you've got 40 million people in this country that do not have health insurance, you're going to provide subsidies for some, and for the others who can afford to pay, you're going to require them to participate. And that's just a matter of, you know, fairness and being - in effect paying your fair share.

The troubling thing, though, was that there were no real exchanges back and forth between the justices where it seemed like, you know, Ruth Ginsberg's question engaged Kennedy or Scalia or whatever to, you know, to sort of take it seriously.

They seemed - this is one that, you know, is clearly they've thought about this a long time, and their view seemed to be pretty well set at the beginning of the argument.

CONAN: And as we listen to the - as you listen to the arguments, did it seem like the solicitor general had a bad day, or was his argument fundamentally weak?

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SAVAGE: It's a little of both. He's got a tough argument. It is a tough argument to say: what's the limit here? If they can do this, what's - why is this different, and what's the limit? But I didn't think Don Verrilli had a particularly great day of either enunciating those limits very clearly or making any headway in convincing the conservative justices that this was really very much in line with the regulation of commerce, as opposed to their view, which is going a step further by requiring people to engage in commerce.

CONAN: And does he get, briefly, another bite at the apple tomorrow when they discuss severability? In other words, if the individual mandate is found to be unconstitutional, does the whole law need to be thrown out?

SAVAGE: Yes, he does get another try, although that's the part of the argument, you know, he was hoping not to have to face that seriously. But now it looks like that that's a big deal tomorrow because there is the prospect that they might say the mandate is unconstitutional.

CONAN: David Savage, the Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. In a moment, we'll by joined by Sarah Kliff, the health policy reporter for The Washington Post and our own Mara Liasson, NPR's national political correspondent, as we review today's arguments before the Supreme Court on the major and most contentious issue, the individual mandate. Stay with us. I'm Neal Conan. It's the TALK OF THE NATION from NPR News.

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CONAN: This is TALK OF THE NATION from NPR News. I'm Neal Conan. The Supreme Court scheduled three days of arguments this week on the Affordable Care Act. Today, the most contentious issue: the individual mandate. In two hours and two minutes of arguments, the justices repeatedly pressed the government's lawyer to explain why Congress has the power to make Americans purchase health insurance. And if it does, what else does the federal government - could the federal government force you to buy?

Two more sessions set for tomorrow. One will focus on what happens to the rest of the law should the individual mandate be struck down. The other will deal with Congress's ability to expand Medicaid. Again, the court's decision is expected in June. The outcome will be a focal point of the 2012 presidential election. More on that in a few minutes with NPR's Mara Liasson.

David Savage is with us, as he often is in these cases, Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. And also joining us is Sarah Kliff, health policy reporter for The Washington Post, with us from the studios at that newspaper. Nice of you to join us.

SARAH KLIFF: Great, thank you for having me.

CONAN: And remind us of the centrality of the individual mandate.

KLIFF: Right. So the concept of the individual mandate, and, you know, why it's so central is the idea that in order for the health reform law to work, to expand insurance to 32 million people, you can't just have the really sick people sign up. If they did, premiums would get very expensive.

What the individual mandate does is it requires everyone, sick or healthy, to purchase health insurance. That makes premiums affordable, and that's really what makes the health reform law's expansion of coverage work.

CONAN: So it's the mechanism by which you get to near universality.

KLIFF: Exactly, and there are, you know, some other ways to do it. There are different policies that states have tested out. None have worked as well as the individual mandate, and you have seen a few states, Kentucky and New Hampshire come to mind, who tried to pass new laws that required insurance companies to accept everybody no matter what their health care status without mandating coverage.

And those laws were repealed because they saw what insurance companies call a death spiral, where only the very sick people signed up, and premiums got far too expensive.

CONAN: And this was part of a grand deal with the insurance companies, who said OK, we will accept everybody regardless of previous conditions if everybody's in the pool. So what happens to that grand deal if the individual mandate is struck down?

KLIFF: Exactly. I think, you know, of all the interested parties watching this, the insurance industry is one of those most fearful of the mandate falling. You know, they've sent out a lot of things to reporters and to folks they work with saying this is a very central provision, and if you strike down the individual mandate but still have us cover everyone, insurance is going to be unworkable.

And I think that's also why tomorrow's hearing on the idea of severability, whether anything else falls, is going to be crucial because there the justices are going to look at if we strike down the mandate, do we already get - do we also get rid of this provision that everyone has access to insurance?

CONAN: And David Savage is still with us, the Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. David, are both sides going to argue that, in fact, it ought to be all struck down if the individual mandate goes?

SAVAGE: No, no, they're going to hear three different arguments. Don Verrilli, representing the administration, is going to say, yes, the guaranteed coverage provision should go, that the insurance companies should be relieved of that mandate.

They've appointed an attorney to argue that nothing should be struck down. Then the challengers, Paul Clement's side, is going to argue the entire law should be struck down. So they have three options tomorrow. But the government is taking the position that the guaranteed coverage provision can't stand, can't remain if the mandate falls.

CONAN: And Mara Liasson, NPR national political correspondent, joins us here in Studio 3A. Mara, this is President Obama's signature legislative achievement of his first term. It appears to be at risk.

MARA LIASSON, BYLINE: It certainly is. You know, interesting just to continue the discussion about the mandate, the mandate was the one thing that health insurers probably liked about this bill. Their problem with it was that the mandate wasn't strictly enforced enough. They thought the penalties for not having insurance were too low. They were afraid it wasn't going to get them enough customers; people would rather just pay the money.

But the administration has been open and said if you strike the mandate, you're going to have to get rid of the ban on preexisting conditions, and you can't tell insurers they can't charge more for someone with preexisting conditions.

CONAN: So, in other words, that's the administration saying you don't get the bennies of this, no preexisting conditions, without the penalties.

LIASSON: Well, you don't get two bennies. You can't have a ban on insurers prohibiting people with preexisting conditions. That'll die with the mandate.

CONAN: Very popular.

LIASSON: Yes, that's very popular, even though the mandate itself is very unpopular. And you also can't have any charging people more, higher premiums for people that have health problems. So insurers, if the mandate goes, insurers would be free to deny people insurance who have preexisting conditions or to charge people more who have preexisting conditions.

CONAN: Would they be free to set that cap that we heard so much about during the debate, that you can only, if you have health insurance, spend X million dollars. It sounds like a lot of money, but if you have a serious medical problem, you hit that cap pretty quickly.

LIASSON: That I don't know. But there are a lot of things in this bill, in this law that people like. They don't like the mandate. They think overall the bill should be overturned. I mean, the polls have been pretty strongly negative. When The New York Times recently polled about whether you think the mandate or the whole law should be overturned, and that got majorities.

CONAN: Both of those?

LIASSON: Both of those - well, no, together they got a big majority. Overturning the whole law got 38 percent. Overturning the mandate got 29. But keeping the entire law in place only got 26 percent support.

CONAN: And David Savage, the Supreme Court, at least theoretically, is not supposed to take the fact of politics and the fact that this is an election year. They're not supposed to take that into account.

SAVAGE: No, but they're certainly very aware of it. This would - you know, if the court were to strike down this law on a five-to-four vote in June, I also think it would make the court a big issue in the campaign because this would be a situation where - Don Verrilli tried to make this point at the end. He said, you know, you ought to defer to the democratically accountable branches of government.

If the court were to strike this down, you'd have the five Republican appointees of the Supreme Court striking down a law passed by the Democratic House and Senate, signed by a Democratic president. It would get a lot of attention as a pretty bold step. It's been since 1936 that the Supreme Court has thrown out a major federal regulatory law. So it's quite a - it would be quite a big deal, I think.

LIASSON: You know, I've asked the White House, well, if this is thrown down, you know, what are the options you're considering? Clearly, one of them would be to go to war against the court, to say this was a partisan decision. I don't think they're going to do that. I think they think that's a total loser.

I think that even though this court has come to be seen as more partisan over the years - Bush vs. Gore, their willingness to overturn presidents and make law...

CONAN: Citizens United.

LIASSON: Citizens United, I do think that most of the Democratic minds that I've talked to think that there is still a bedrock respect for the Supreme Court. And when the Supreme Court says this law is unconstitutional, the message is that, you know, Barack Obama, former law professor, couldn't - didn't even know that he was passing something that was unconstitutional. I think the Supreme Court will still be seen as the final, you know, the final word on this, even though there are many people - certainly there will be many Democrats who think it will be partisan.

But, you know, there's a reason we didn't have riots in the streets after Bush vs. Gore. I mean, people will accept this. And I do think, you know, there are a lot of people who have been scratching their heads about what will be the political consequences of this.

I think in the end, the economy will be the bigger issue. Health care will not determine the outcome of the presidential election. But it will be a big blow to the president, and it might energize his base. I mean, I think immediately he is going to have to have something to say.

He ran on this. He promised to do it. He fulfilled his promise. Now he's going to have to go right back up to Congress with some kind of a proposal to keep these popular provisions intact.

CONAN: Sarah Kliff, if - and it's dangerous to read into justices' questions an assumption about how they will vote - but if the law is struck down, if the mandate is struck down, back to square one?

KLIFF: You know, I think it's a big question of what happens tomorrow, if, you know, you just see the mandate struck down versus the mandate and some other provisions. If it's, you know, just the mandate, then you're left with this challenge of how do you get people to sign up for insurance?

There are some other policy options out there, things like doing an open enrollment period, where you can only enroll at a certain point, or else you're going to be, you know, responsible for covering your own health care using some tax incentives.

CONAN: But would that freeze people out if they went to the emergency room with a life-threatening condition, I have no insurance?

KLIFF: Right, so that would be the challenge there, you know, is - and it wouldn't be expected to work as well as a mandate could. And there's some challenges. There is legislation that does require emergency rooms to treat anyone seeking, you know, treatment for a life-threatening condition. So there's, you know, a bit of a challenge there in terms of actually making that work.

The biggest challenge, I think, though, is Congress. I don't think they would be inclined to pass something, especially with a Republican-controlled House, to fix the Obama administration's signature legislative accomplishment. So, you know, even if the White House does find itself back at a drawing board, there's really probably not much political space to actually move something through Congress.

CONAN: And Mara, of course we remember this was passed with absolutely zero Republican votes.

LIASSON: That's - all along, people said that it's very important when you're passing something of this magnitude and importance that you have some kind of bipartisan mandate for it. Not only was...

CONAN: A different kind of mandate...

LIASSON: Yes, different kind of mandate, because you have to have buy-in because it is so big. Not only did they not have any Republican votes, but if you remember, the kind of extraordinary way they passed this, using the reconciliation process where they, instead of having to have 60 votes, they only had 51...

CONAN: In the Senate.

LIASSON: They lost a Democrat in the special election in Massachusetts. It's very - many people thought it was extraordinary and a little bit out of - outside the rules, even though it was perfectly legal to do it this way. So it was passed in an unusual way, and it was heaved over the finish line with no Republican support. So I think that that was not, you know, an auspicious way to begin this fundamental transformation of health care.

But I do think that one thing this guarantees - it's very hard to game out the politics of this and who will benefit and who won't after the Supreme Court rules, assuming the mandate is overturned. Will it slake the enthusiasm of the Republican grassroots because they've achieved their victory, they don't have to work so hard anymore? Who knows? But I think one thing we can say with some certainty: It will return health care to front and center in the political debate, where it really hasn't been up until now.

CONAN: David Savage, again, we're reading tea leaves here. As I understand it, toward the end of the morning session today, two of the justices spoke and said - seem to set themselves, at least rhetorically, in the middle.

SAVAGE: I'm not sure who you're referring to.

CONAN: Justices Kennedy and Roberts.

SAVAGE: Yes. Well, I do think that Kennedy and Roberts at least seemed to acknowledge that health care is a different type of market that the government - it's not like just buying any product. And so at least some of the framework I thought that they agreed with the government. I just didn't hear them sort of coming around to the view that they were convinced that the mandate was the only or best or constitutional way to solve the problem.

They - I don't think they ever backed off their view that this is something new, different and a bridge - and they seemed to say a bridge too far. But we actually will know - I think we'll know a little more tomorrow when they talk about the severability provision because I'm curious whether they sort of talk about that in the sense that, you know, they're going to strike down the mandate. So I'm interested to see how they discuss it tomorrow.

CONAN: In other words, if they tear down the mandate, is that Samson pulling down the pillar, bringing down the whole temple?

SAVAGE: You know, they could phrase it in a very tentative way. Suppose we were to actually think of a possibility of even striking down the mandate (unintelligible) - or do they sort of assume, as I've seen in some other judges, just sort of assume they're going to strike down the mandate and spend a lot of time talking about severability? So I'm interested in sort of how they phrase it tomorrow.

LIASSON: Because I'll tell you who will be really listening to those arguments, is the insurance industry, because it's possible they could be left high and dry. All those other popular provisions that people like - and I don't even know if Republicans would want to run on not letting your kids stay on your plan till they're 26, not having the doughnut hole repaired, all these things that people like - all of those things come out of the hide of the insurance companies.

And if they don't have the mandate to give them all those new customers, they're going to be really disadvantaged. And maybe it turns into a big fight about whether you want to protect the insurance companies or not, or you know, protect these provisions that - assuming the Supreme Court doesn't throw out the entire thing.

CONAN: Mara Liasson is with us, NPR's national political correspondent, Sarah Kliff, health policy reporter for the Washington Post, and David Savage, Supreme Court correspondent for the Los Angeles Times and the Chicago Tribune. You're listening to TALK OF THE NATION from NPR News.

And Sarah Kliff, as you listen to those arguments tomorrow on severability, what is it you're going to be listening for?

KLIFF: Yeah. I'm going to try and get a sense of what they think is connected to the individual mandate, what couldn't stand if they were to strike down that provision. And you know, there's a lot of things that could or could not fall into that basket. Guaranteed issue is probably, you know, the biggest one, this idea that insurance companies have to accept everyone, that in 2014 there'll be no more pre-existing conditions.

Community rating is another one. That came up a little bit earlier on the program, this idea that insurance companies will be very limited in how much they can charge sick people more than healthy people, or charge older customers more than younger customers.

There's also a question of some other insurance reforms, things like ending pre-existing conditions for kids, an end to lifetime limits, allowing young adults up to age 26 to enroll in their parents' insurance. Those are things that are in more of a gray area where, you know, they were - those provisions were part of what the Democrats really liked about the law and what they've been selling it on. But, you know, those could be some of those new benefits that the court could say are related to the mandate, and those could fall as well.

CONAN: And Mara Liasson, in terms of the political campaign, the front-runner for the Republican nomination, Mitt Romney, of course has sponsored mandates of his own when he passed the health care reform in Massachusetts.

LIASSON: Yeah. Although it's hard to game out all the politics of this, I think we could say that Mitt Romney will be happy and will get a great burden lifted off him if the Supreme Court gets rid of the mandate, because then we don't have to ask the question: Well, Romney pass them in Massachusetts, can we trust him to overturn them, you know, if he's president?

CONAN: Repeal them.

LIASSON: Repeal them. It would already be done. And I think one of his big problems with the conservative base of the Republican Party has been Romneycare. That's been, you know, I think, the biggest irritant. So it would be good for him.

But I do think that if health care is still a kind of even playing field, he has a disadvantage to argue against President Obama's plan because the Obama people are there every day saying we got all our ideas on this from Mitt Romney.

But, you know, it's interesting to me that - you know, the history of this is so fascinating because this was a Republican idea. It came out of the Heritage Foundation.

CONAN: The mandate, yeah.

LIASSON: The mandate. It was basically to get rid of the problem of free riders. Everybody who shows up at the emergency room for a life-threatening problem is going to get health care. And that means all the rest of us are going to pay...

CONAN: One way or another.

LIASSON: ...one way or another for that person who had no insurance or can't pay for it himself. And it's only recently, only in the last couple of weeks, that I have heard an Obama campaign person call the mandate the individual responsibility mandate. Why they never tried to frame this in the terms that Republicans used to frame this in - this is the anti-free-rider provision. But anyway, they didn't.

CONAN: Mara Liasson, thanks very much for your time. We appreciate it. Sarah Kliff, thank you also for your time. David Savage will be back with us on Thursday as we wrap up the week's arguments. Again, the Supreme Court will be back tomorrow to hear arguments, both afternoon and morning, one on the severability issue and one on the question of whether Congress overreached by imposing too much burden on the states in terms of expansion of Medicaid. So David Savage, we'll talk to you again Thursday. Appreciate your time.